By KeyCrew Media
In Kansas and Missouri’s industrial outdoor storage market, two sites with identical zoning in the same corridor can trade at very different prices, not because of location, but because of what’s already built on the ground. Physical infrastructure is becoming the dominant pricing variable in IOS transactions, according to Logan Freeman, Managing Broker at Midwest CRE Advisors, creating a clear opportunity for sellers who understand how infrastructure drives value.
When Land Comps Give Way to Income Underwriting
The traditional approach to valuing industrial land, pulling comparable per-acre sales from recent years and anchoring to that number, is increasingly giving way to how IOS buyers actually underwrite deals, according to Freeman.
The buyers making the most aggressive offers are working from an income underwriting overlay, Freeman says: what can the site lease for per acre per month, what does that income stream capitalize to, and does the resulting value make sense relative to the going-in land cost.
The math produces numbers that can pleasantly surprise sellers still anchored to older benchmarks. A 10-acre site leasing at $3,000 per acre per month generates $360,000 annually. Capitalized at 6.5%, that implies roughly $5.5 million in value, a figure that may be substantially above what raw land comps in the same corridor would suggest.
“Sellers in secondary corridors often anchor to what a neighboring piece sold for three years ago,” Freeman says. “Buyers are underwriting to today’s achievable rents and today’s cap rates.”
Freeman says that spread between seller expectations and buyer offers can reach 20–40% in markets without recent IOS-specific closed transactions, a gap that, once understood, gives well-positioned sellers real room to capture additional value.
Paving as the Largest Swing Factor
Within that income underwriting framework, physical infrastructure most directly determines where a site lands in the valuation range, and paving is the most consequential single element, according to Freeman.
A fully paved site with a stabilized surface and proper drainage can command 15–25% more than a gravel or native-soil site, Freeman says, because the buyer avoids inheriting a $300,000–$500,000 site improvement cost before lease-up can begin. Gravel surfaces work well for some users, and when a buyer is ready to invest in full paving and drainage, that improvement becomes a clear path to a higher-value asset.
Power infrastructure is the second most valuable variable. IOS tenants, particularly fleet operators and contractors with equipment charging requirements, increasingly need three-phase power or at minimum 200-amp service at multiple points across the yard. Sites with that infrastructure already in place command a measurable premium over those still positioned for electrical upgrades.
Curb cuts function as operational gatekeepers. Two wide curb cuts on a major arterial, sized for semi or heavy equipment movement, versus a single residential-style driveway, that distinction alone has moved buyers from interested to aggressive on deals Freeman has worked. Direct highway visibility rounds out the list, adding both operational value and marketing appeal for tenants.
A 40% Price Gap on Identical Zoning
Freeman points to a direct comparison in the Cass County corridor that illustrates how sharply infrastructure shapes pricing between otherwise comparable sites.
One site was fully gravel, had a single curb cut on a secondary road, no fencing, and reasonable proximity to I-49. It drew solid interest and steady pricing. A comparable site in the same corridor, paved, two curb cuts, 8-foot chain link already installed, and direct highway visibility, traded at nearly 40% more per acre.
“Same zoning, same general location,” Freeman says. “Infrastructure was the entire story.”
When a buyer factors in $300,000–$500,000 in paving and drainage before the site can generate income, that investment is reflected in the offer price, as the buyer also accounts for execution and carrying cost during the improvement period, which highlights the upside available to sellers who complete those improvements ahead of time.
Freeman says the sites commanding the top of the $2,000–$5,000 per acre per month lease rate range, the $4,500–$5,000 tier, are concentrated in areas like Johnson County and the I-35 corridor in Kansas, where demand from HVAC, landscaping, utility contractors, and fleet operators is dense and competing IOS inventory is thin. Infrastructure quality is what distinguishes the sites that capture that premium.
Repositioning Before Listing
Freeman says his approach involves evaluating infrastructure gaps before a site goes to market and advising sellers on whether targeted improvements, paving, power upgrades, fencing, or curb cut additions, can move a site from the bottom of the valuation range to the top.
The calculus Freeman describes is direct: if a $150,000 paving investment eliminates a $400,000 buyer discount and moves the site into a higher income tier, the seller captures a net gain that far exceeds the improvement cost. Many sellers discover this math for the first time when they see how proactive improvements strengthen their offers.
One key step Freeman highlights before listing is rezoning. In Missouri, a typical M-1 rezoning from agricultural or residential zoning runs 90–180 days minimum with an active planning department. In Cass County, Freeman says he has seen it stretch to 9–12 months when a site crosses municipal annexation territory or when neighbors organize input. He advises legacy landowners to get a pre-application meeting with the planning department before going to market, a step that can clarify whether a site has a clean path or a conditional path, and that shapes pricing and buyer pool strategy from the start.
Freeman says IOS demand is concentrating in secondary suburban corridors like the I-49 south market, Raymore, Belton, Harrisonville, where residential growth has outpaced industrial supply and contractors are following rooftops into areas with almost no purpose-built IOS inventory. In that environment, buyers with institutional capital are becoming increasingly disciplined about underwriting site preparation costs, which means income-ready sites enjoy a deepening buyer pool and strong demand.
Midwest CRE Advisors is a commercial real estate brokerage and advisory firm specializing in data center site selection, industrial outdoor storage, and traditional commercial investment across Kansas, Missouri, and the broader Midwest. Founded by managing broker Logan Freeman, the firm has carved out a specific niche identifying brownfield industrial sites and stranded power capacity for AI infrastructure deployment – a space the large national brokers are not focused on. Active in secondary markets including Kansas City, Oklahoma City, Arkansas, Iowa, and Nebraska, the firm serves AI infrastructure companies, colocation operators, and regional developers evaluating Midwest sites, as well as local and regional investors pursuing industrial, flex, land, multifamily, senior housing, and single-tenant commercial acquisitions and dispositions.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
